This is certainly not supposed to happen. Keystrokes should not be recorded and sounds really suspicious to me. However, your question does not list any details, which makes it very hard to answer. What kind of screen is this? What software did you install after installing Ubuntu? Keep in mind that we can't see your screen and we don't have access to your PC. We rely on the specific information you provide in your question.
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gertvdijkJan 30 '13 at 22:44

I added a little more info. Is there more that you need?
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posfan12Jan 30 '13 at 22:56

It's still very vague to me. Would it be possible to provide a series of screenshots or a video? Since you're running it virtual this should be really trivial! :)
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gertvdijkJan 30 '13 at 22:57

Can you use your smartphone or something to actually record a short video of this? It's hard to tell from your description what it looks like.
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KenJan 31 '13 at 0:28

I couldn't get it to happen again. It just looks like a terminal window with a black screen with lots of text and each sentence I typed on a new line. Will try again tomorrow.
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posfan12Jan 31 '13 at 10:42